New Delhi, Sept. 16 -- Last week, the Securities and Exchange Board of India (Sebi) agreed to reclassify real estate investment trusts (REITs) as equity instruments. This allows mutual funds to increase their allocation to REITs alone up to 10% (single issuer limit) of their net asset value.

This change raises an important question-will this affect how small investors approach REITs? Should they invest directly or via mutual funds?

At first glance, the move seems significant. With the broader allocation limit, hybrid equity funds like balanced advantage funds, flexi-cap funds, and multi-asset allocation funds may increase their REIT exposure. However, experts say that for retail investors, the choice between direct ownership and mutual ...